An Introduction to Islamic Finance: Theory and Practice

FIGURE 14.1

Key drivers of regulatory change for fi

nancial institutions

Source: Portilla (2009)

Financial Institutions

Accounting

Fair ValueMeasurement

Loan LossProvisioning

Securitizationand Off-

BalanceSheet GlobalCoordination

and

Convergence

OTC

Derivatives

Fair ValueMeasurement

CentralClearingHouses

Compensation

Guidelineson

Risk

Alignment andGovernance

Potential Linkto CapitalConservation

ShareholderSay on Pay Deferrals andClawbacks

Securitization

Skin-in-the-

Game

UnderwritingStandards

Capital

Requirements

DisclosureRequirements

Registration RatingAgencies Standards

Bank Capital

Quality ofCapital

RaisingMinimumRatio

Counter-CyclicalBuffer

LeverageRatio

SystemicallyImportant

Firms

Transparency& Disclosure

CapitalSurchargeson Size

Living Wills

Cross-BorderResolutionRegimes

IncreasedOversight

Simplificationof Structure

Liquidity

Liquid AssetBuffers

CentralBankFacilities

Ringf encing

Funding

2

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